February 15, 2017

Arizona Supreme Court should strike down minimum wage law

The Arizona Supreme Court announced yesterday that it will hear the lawsuit that challenges the constitutionality of the state's new minimum wage law. The plaintiffs argue that it violates the rule under which any initiative that requires the state to spend more money must identify where the money is coming from. I argue in this article in the Arizona Capitol Times that the law also illegally gives special favors to unions by exempting employers that sign collective bargaining agreements.

Excerpt:

Minimum wage laws are laws against jobs. Last year, someone with little experience, who couldn’t compete against other job applicants, could have told a business owner, “hire me for $9 per hour, and let me work my way up to $12.” Prop. 206 makes that illegal....

True, some workers will benefit from Prop. 206. But those benefits come at the cost of people seeking jobs, who find opportunities reduced, and consumers who must pay more for goods and services they need....

Actually, supporters of Prop. 206 are counting on that. Hidden among its back pages is a special loophole that exempts union shops from meeting Prop. 206’s expensive time-off mandates. The reason is obvious: left to their own choices, fewer than 5% of Arizonans join unions. Union labor is often expensive and inefficient, and businesses offer plentiful benefits to non-union workers. By making life harder for non-union companies, and then exempting companies that sign a union contract, Prop. 206 forces non-union companies to cave in. It’s no surprise that unions were the initiative’s loudest backers.

Such political favoritism is a bad idea for a state that wants a dynamic and flourishing economy.